US battery plan launch raises trade tensions
The US has launched an action plan for lithium ion battery production with 26 recommendations for boosting the domestic supply chain of batteries and materials that is set to create trade tensions with Europe.
The report has been developed by Li-Bridge, a public-private alliance representing the US battery ecosystem convened by the U.S. Department of Energy (DOE) and managed by DOE’s Argonne National Laboratory.
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The report – Building a Robust and Resilient U.S. Lithium Battery Supply Chain – recommends forming a buying consortium for raw energy materials, a system of shared pilot lines to speed the commercialization of new battery technologies, significant investment in battery industry workforce training, and environmental permit reform. Several of these are key trade issues.
The report says the US can capture 60% of the economic value consumed by domestic demand for lithium batteries, generating $33 billion in revenues and creating 100,000 jobs.
This complements the Inflation Reduction Act (IRA), the Bipartisan Infrastructure Law, and the CHIPS and Science Act, all of which are key issues in the trade concerns with China and the European Union.
Members of the European Parliament (MEPs) want the Commission to take a stronger stance on tackling unfair global competition caused by unjustified state aid. On Thursday they expressed concern about provisions in the US Inflation Reduction Act (IRA) which discriminate against EU companies. They voted for the Commission to work with the US to make sure the EU is covered by the exceptions provided in the IRA for countries with a free trade cooperation, and that European products are eligible for tax credits like their US counterparts.
The EU has signed its CHIPS Act, and is working on a Critical Raw Materials support plan alongside its Green Deal Industrial Plan. However the funding for the IRA in the US has raised concerns with trade officials over subsidies. However the US believes it is actually behind Europe.
“Although we are starting to see activity in the domestic battery manufacturing sector thanks in large part to the Bipartisan Infrastructure Law and the IRA, US industry is still 10 to 20 years behind Asia, and about five years behind Europe, in commercializing manufacturing of this critical technology,” said James Greenberger, Executive Director at NAATBatt International, one of the industry groups supporting Li-Bridge.
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“The electrochemical storage of electricity will be as important a technology to the economy of the 21st century as the semiconductor chip has been,” he said.
This is not the view from Europe.
“We have learned that without a strong manufacturing base, Europe’s security of supply, export ability and job creation is at risk. We already see a trend emerging of being relegated to net importers of electric vehicles, replacing our dependence on fossil fuels with industrial and technological dependencies,” said , European commissioner Thierry Breton.
“Without an industrial plan for the Green Deal, we risk importing new dependencies, endangering our security of supply, reducing our export capacity, and exporting our jobs. Work is ongoing to identify the investment needs, but if we look at the plans developed by the US (€340 billion), Japan (€140 billion) and China (€260 billion), and what the Canadians are about to do, my view is that we may be looking at between €350-400 billion investments to be mobilised in these clean technologies at European level.”
Alongside NAATBatt International, the Li-Bridge group in the US includes the New York Battery and Energy Storage Technology (NY-BESTTM) Consortium, and New Energy Nexus with active involvement from DOE national labs and Boston Consulting Group. Li-Bridge is the first collaboration of its kind in the US battery industry.
“This report provides key insights and solutions toward the goal of establishing a resilient domestic manufacturing base and supply chain for batteries, summarizing in-depth discussions between private industry, DOE’s national labs, and federal partners,” said Argonne Director Paul Kearns. “The adoption of the report’s recommended actions can set the nation on a path for success.”
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